Soft Credit Checks Can Save You Money On Insurance

Woman holding credit card looking at computer
Feb 05

Did you know that having a soft credit check done on your credit score could potentially save you money on your home and private car insurance? It’s true! Many insurance brokers are willing to offer a “good credit discount” – if they don’t already offer it. Most insurers could and should offer the discount though, as they will risk losing business to a competitor if they do not. Read on to learn more about credit scores, soft credit checks, and how much savings on insurance one can expect from such a discount.

Soft Credit Checks vs. Hard Credit Checks

The main difference between a soft credit check vs. a hard credit check is that soft credit checks don’t affect your credit, whereas hard credit checks can affect one’s credit. The reason this is the case is because soft credit checks are more of just a check-up per se, and one should be able to check on things as many times as wanted. However, hard credit checks is when someone is officially requesting extra credit for some sort of financing, so it’s an important piece of information on someones credit report. If someone is asking for credit & financing from too many lenders too often at once, that’s not really a good sign.

The important thing to take away from this is that soft credit checks do NOT affect one’s credit score, so getting soft credit checks done from time to time is definitely OK – and advised actually. Being able to see & show your (good) credit score can have a number of benefits, including savings on insurance if your credit is strong enough. Keep reading to learn more about what a good credit score is, what goes into building good credit, as well as what kind of savings can be had for those with strong credit reports.

Good Credit Scores

Credit scores fall in a range between 300 to 850. There are a few different opinions as to what classifies as a good score, but the general consensus is that a score of 700 or higher is generally considered good. Scores of 750+ are very good, and scores of 800+ are considered exceptional. Scores below 650 fall into the fair or (very) poor range. Most credit scores are found to be between the 650 to 750 range.


How To Build Good Credit

The only way to build good credit is to have a history of paying financing bills on time. In order to do this, one must first have bills to pay, and then they have to pay bills on time consistently. Most people start having a credit history once they get their first credit card, but other common financing scenarios include; student loans, car loans, and mortgages. There are others, but these are the most common forms of financing that one deals with. As long as you pay your bills in time, you will continue to build your credit.

Home & Car Insurance Savings From Good Credit Scores

If you find yourself with a strong credit report & score, you may be able to squeeze some extra savings from your insurance costs. As mentioned earlier, many insurance companies now offer a “good credit discount” on home and car insurance. These discounts are not huge (usually falling in the 5%-20% discount range), but can still save someone hundreds of dollars a year in insurance costs!

The Bottom Line on Credit Scores & Insurance

If you don’t know what your credit score is already, make sure to look into getting a ‘soft check’ done on your credit ASAP. Remember, soft credit checks won’t hurt your credit score, so no need to worry about that. It’s always good to have a good idea of what’s on your own credit report. Especially since having a good credit score may be able to give you up to 20% discount on your home and car insurance! Speak to an insurance broker at Harbord Insurance today to learn more about this discount!


Discuss Your Credit Score (& Possible Discounts) w/ Harbord